Because of the way Zell structured the his purchase of the Tribune Co., workers technically own the company. But they'll get nothing from the bankruptcy settlement. The only group of workers who won't be left high and dry in retirement (other than Zell's pals in management) are Teamster-represented Tribune workers. They're still receiving contributions to their pension funds as required by their collective bargaining agreements.
Sadly, it isn't really shocking that a private leveraged buyout would result in the destruction of a functioning business like the Tribune Co., which owns the Chicago Tribune, the Los Angeles Times and WGN. The Teamsters have had plenty of nasty experiences with private equity firms. They tend to buy profitable companies, load them with debt, loot the assets and then kick their worthless carcasses to the curb.
What is shocking about the Tribune Co. is the way the new management abused employees. As The New York Times reported, executives'
...use of sexual innuendo, poisonous workplace banter and profane invective shocked and offended people throughout the company...
Now Teamsters are generally not offended by a little bad language. But according to the Times,
One of their first priorities was rewriting the employee handbook.
“Working at Tribune means accepting that you might hear a word that you, personally, might not use,” the new handbook warned. “You might experience an attitude you don’t share. You might hear a joke that you don’t consider funny. That is because a loose, fun, nonlinear atmosphere is important to the creative process.” It then added, “This should be understood, should not be a surprise and not considered harassment.”
In that "nonlinear atmosphere," 4,200 employees lost their jobs. The Tribune Tower was turned into a virtual frat house, the immensely popular WGN-AM radio station was ruined and longtime employees quit because they couldn't stand the work atmosphere.
Said the former managing editor,
“They wheeled around here doing what they wished, showing a clear contempt for most everyone that was here and used power just because they had it. They used the notion of reinventing the newspapers simply as a cover for cost-cutting.”
How much will top management award itself for driving the Tribune Co. over a cliff in a year?
They've proposed bonuses of $100 million for themselves for 2010.
Now that's shocking.